Original Article

Year: 2014 | Month: December | Volume 59 | Issue 4

Market based financial measures of sugar industry in India



Worldwide sugar is being produced in over 100 countries for the past several years. Larger proportion of world sugar production is consumed domestically and internationally small proportion only traded. Due to the small trading proportion leads to changes in production and government policies. As only a small proportion of world sugar production is traded freely, sugar price is unstable in the global market. Government control over quantum distribution of free sale sugar in the open market in turn affected the price of the sugar and minimum support price for sugarcane. The study would help the decision makers of sugar companies to focus on the major activities that may improve the overall market performance. Forty sugar companies which are listed in the Bombay Stock Exchange were selected based on the extent of market capitalization and annual volume of sales. The data were collected from the PROWESS database Centre for Monitoring Indian Economy (CMIE), Mumbai for the period from 2007 to 2012. The data collected were consolidated and subjected to market structure, conduct and performance analysis (SCP) to draw meaningful inferences. In order to study the market structure and power of the sugar companies Herfindahl Hirschman index and Lerner index was used. The market structure of the companies in North and West zone was highly competitive and these companies had little control over pricing implying lesser market power.

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